The number of employees in EU banks receiving annual remuneration of €1m or more increased to 3,865 in 2014, according to research by the European Banking Authority (EBA).
Its Report on benchmarking of remuneration and high earners 2014 found that this was almost 22% higher than in 2013, when 3,178 employees were classified as high earners.
The report also found:
- 87% of high earners in the EU in 2014 were employees that have a potential impact on their employer’s risk profile, known as identified staff. This compares to 59% in 2013.
- There were 2,926 high earners in the UK in 2014, compared to 2,086 in 2013.
- 242 high earners in EU banks in 2014 were located in Germany, and 171 were in France.
- The average ratio between the variable and fixed remuneration paid to identified staff fell from 104% in 2013 to 65% in 2014. This follows the introduction of the bonus cap in 2014, which limits the ration between variable and fixed pay to 100%, or 200% with shareholder approval.
- The average ratio between the variable and fixed salary paid to high earners decreased from 317% in 2013 to 127% in 2014.
- The fixed salaries of identified staff accounted for 3% of institutions’ administrative costs on average.
The report stated: “The bonus cap did not lead to a material reduction in the overall cost flexibility. Moreover, for many institutions that did not use variable remuneration to a large extent in the past, the so-called bonus cap did not have an impact on the cost structures.
“In 2014, in most institutions, the fixed remuneration for identified staff accounted for less than 1% of their own funds despite the fact that the fixed remuneration for identified staff (with €10.6 billion) was roughly double the amount in 2013 (5.8 billion); the increase mainly resulted from an increase in the number of identified staff, which also nearly doubled in this period.
“All in all, the bonus cap has led to a very small increase in the fixed costs and this is only in some institutions. The present analysis shows no indication that the so-called bonus cap has a potentially detrimental effect on institutions’ financial stability.”